Introduction
Official poverty figures in the United States is calculated by the population and census authorities. In the 2012 statistics, it was identified that some 46.5 million Americans live under the poverty line. This refers to 15% of the population of the United States and these are people who live in households that make less than $23,283 a year which is an income per head of about $10,000. In spite of this, the United States is by far the richest country in the world in terms of assets. There is an average gross domestic product (GDP) of $53,470 per capita in the United States. This means that if money is to be shared equally in America, every American should have about $53,470. However in spite of that, over 15% of Americans are entitled to less than $10,000 per head. This shows there is a major income disparity in the United States of America. This paper presents a thesis that the cause of the financial disparity in the United States is based on the instituted systems of inequalities and poor government policy which is influenced by a rich elite population who control most of the wealth of the country. Therefore, it follows that if these inequalities of the institutions in the United States are addressed, there will be fairer distribution of wealth and poverty amongst the 15% earning less in America will be reduced significantly.
The Rich Protect their Interest and Keep the Poor at the Bottom
The rich are so powerful in America and they lobby and influence the policies of government in order to remain rich and keep the poor in poverty. In a video, a social experiment was conducted and a Harvard professor asked 5,000 Americans what they think the income disparity in America was. Dividing America into five classes based on 20% of the population, 92% of the respondents identified that they believed that the richest 20% of Americans had about 50% of America’s wealth and the next 20% had about 25% of the wealth with the bottom 60% of Americans having just about 25% of the wealth in the country. However, in reality, based on a statistical evaluation of facts, it is identified that the richest 20% of Americans control over 80% of America’s wealth. The next 20% controls just about 10% of America’s wealth whilst the other 60% of Americans control just under 10% of the wealth in the country together. This is so serious that the richest 1% of Americans control over 35% of all the wealth in the United States. This shows that the distribution of wealth in the United States is highly unbalanced. The richest have a lot of power and they control way too much wealth than the rest of the country combined. This shows that there is a major problem and the risks of the French Revolution is at the doorstep of the American people.
Corporate power is used to perpetuate poverty. There is a question of how the rich 20% is able to control over 80% of all the wealth in the United States. The video goes further to state that the top 1% control over 50% of all stocks in the United States and as such, they are able to control a lot of decisions about how to distribute money and how to take decisions. However, with this corporate power and the ability to influence decisions on the distribution of wealth, the rich upper class of the United States is able to influence a lot of things and have some kind of power over the policies that shape the lives of the poorest Americans.
The rich control elections and governments do not do anything to change the hardships the poor are going through.Due to the ability to control a lot of power and authority, the richest people in America form large lobby groups and entities that reinject a lot of money into the political process. These Super PACS donate a lot of money to support the campaign of different political figures. Once these political figures are able to win elections and come into power, the rich are able to present their wishes to these politicians and the politicians make laws that are able to come up with major policies that are favorable to the richest people. The rich always want their interests protected. And this ranges from the invasion of foreign countries to the reduction of taxes. And since these rich Americans contribute more than anyone else, they are able to demand and request for these changes to be made to protect them.
The poor do not have any real political power to ask for the right thing to be done. The poor are not well represented in the funding of political parties. They have nothing more than their votes. And when they vote, they have little or no power over what politicians do. They will have to live within any policy that is made by the politicians. Many of these policies are insensitive to the poor. So the rich continue to exploit them and in terms of taxes and other demands, they are forced to pay more and contribute more to public funding projects. Due to this, the poor remain poor and the rich continue to prosper.
Lack of Opportunities Make the Poor Remain Poor
The poor offer themselves for wages and due to that they are exploited by powerful employers. The poor and working class have little to do but to offer their skills and competencies in return for wages. In jobs and sectors where there is a huge pool of people willing and able to work for a lower salary, the rich have the ability and the opportunity to exploit the poorest of Americans. This is because when there are many poor and unskilled people, there is more competition to fill vacancies that require no experience and no real skills. Therefore, there is a huge demand for these jobs and business owners, who constitute the richest class of Americans have the opportunity to control the offer. This is because irrespective of how low they pay workers, they are likely to get people willing to take up those jobs. Hence, they end up paying extremely little for the labor of the poorest people in the United States.
The poor are caught in a vicious cycle of poverty that they cannot break away from. Many poor people are from disadvantaged backgrounds and as such, they are likely to be caught up in habits and activities that make it difficult for them to get any real skills and/or advance their earning capabilities. Every poor neighborhood in America has major social problems including drugs, violence, crime and early pregnancy. Therefore, people are more likely than not, to have children they cannot afford in poorer parts of America when they are in their teenage years. This reinforces their poverty status. The lack of opportunities ensures that they are likely to fall into bad company. And once they fall into such situations, they are more likely to be put in jail to prevent them from causing any problems. This means that the poor from a poor background is likely to end up providing cheap labor or becoming a career criminal. This is due to the fact that they might never catch up in the struggle and the process.
The poor get low income jobs so they cannot save, they cannot invest and they cannot change their lives, this causes poverty in America to grow. More significantly, when people fall into poverty, they are likely to get jobs that have low income. This is because when you are unskilled, you have to compete with a lot of people for job positions. This means that you will have to settle for less income because when you turn down on an offer for a job, there are many who are willing to take up those jobs. This creates an underclass that can struggle in catching up with the rest of the others. Low income means there is a low likelihood of studying beyond high school. This is because apart from high schools which have public school versions, there are no free universities and colleges. A person needs a scholarship in order to go beyond high school. And this requires a lot of money that most people cannot put together. Therefore, people within the poorest communities end up with low qualifications like high school qualifications and then pursue jobs that pay very little.
The poor cannot do anything but remain in a system that promotes their poverty. Since a person earns so little, there is the lower propensity to save because the poor have a lot of bills to pay and cannot possibly save enough money that will give them a comfortable life. Due to this, the poor spend all their money on their basic necessities (especially if they have children). And when this is exhausted, they have little or no option but to go back and work in order to earn enough money to cover their bills and obligations. This means that the poorest households will have to work for less income and this income is typically below $30,000 a year. And this causes poverty which is in itself a problem which creates more poverty and problems for such a person.
The lack of the power to save and invest leads to a vicious cycle of poverty. When the poor are unable to save, they are unable to invest and this means they get caught up in the vicious cycle of poverty. This is because what sets apart the rich from the poor is their ability to save enough money and invest in stocks. With those stocks, they are able to gain control over companies and then create more companies that keep them rich for all times. The problem with the poor is that they are not able to invest any extra income. And due to this, they are in a difficult situation because they have to live on the little they earn and spend all their time working and concentrating on their survival. This causes poverty to be perpetuated and this continues. The lack of knowledge and the lack of education and financial knowledge means that most people are willing to work for money and cannot do anything more than just work and earn enough to survive.
Government Intervention is Necessary to Break Historically Enforced Poverty
Poverty is based on historical factors and this is what is keeping people poor. Some people in the United States are poor not only because of the choices they make. Many get poor mainly because of the circumstances they were born into. History is stuck against certain classes and groups of Americans. For instance, when the United States was founded, it was an English colony. Everyone else was an outsider and the colonial government created discriminatory laws against them. Therefore, Native Americans and Irish Americans were treated as a second class who were to be poor and work for low wages. There is also the case of African-Americans who were brought in as slaves only to work with no right for any wages. This historical foundation ensured that Irish, Native Americans, African-Americans, Asian-Americans and Europeans from other parts of Europe were to be treated as second class citizens. This is because the US Constitution was prepared to exclude these people and permit discrimination against them.
For poverty to end, history has to be reversed and this can be done by making laws that reverses historical disadvantage. African-Americans and Native Americans are amongst the poorest people in the United States. This has historical and social significance because African-Americans were not treated as human beings protected by the US constitution in the first 100 years of its existence. African-Americans were slaves and they were to be treated as slaves for an extended period of time. In order to free African-Americans, America had to go to war to free them and allow them to work for wages. After the freeing of African-Americans, there was segregation which ensured that African-Americans got only the worst of education and the worst of conditions in America. Thus, it was only 50 years ago, that African-Americans got the right to be treated equally and fairly. Even after that, there have been institutionalized racism and the mass incarceration of African-Americans just to suppress them. This caused many African-American males and potential fathers to be kept in jail and this destroyed the very fabric of the African-American society.
Many of the government’s welfare programs are not helping to eradicate poverty. Native Americans who were considered a bunch of “hostile” people in the United States who impeded the development of the White civilization in the Americas. Thus, efforts was taken to exclude them from the activities of White America. Native Americans were kept in Native Reserves where they lived very basic lifestyles without having access to mainstream American lifestyle. However, in this period where they are increasingly integrating, there are major limitations and major problems with the inability of these people to gain enough money and break the cycle of poverty. These inherent problems with minority groups are institutionalized and they contribute to the disparities in the income levels of Americans. This has caused the income gap to widen and poverty is serious in most parts of the United States.
Discrimination and disadvantage amongst the minorities is a major contributing factor that leads to poverty in America but the government is doing little to deal with it. The United States’ minorities are usually overrepresented in lists of poor people and this is mainly because the minorities are stuck in unfortunate cycles because of historical policies and problems. Furthermore, there are many pointers that pin down these minorities and this includes their practices and major hurdles put in their way by systematic processes. There is evidence of many Europeans from Italy, Spain and other parts of Europe who came to America after World War II, but because of the institutionalized racism and negative actions that were in place in America, these Americans remained poor and were stuck in poverty whilst the foreigners from poorer parts of Europe got a lot of wealth and became rich at the expense of Americans living under discriminatory conditions. The truth is that some of these institutionalized practices and processes of the American society is serious. It has created situations and matters that are complicated and difficult and cannot be changed easily. This means that there are many things that ought to be changed in order to break the disadvantage and challenges with people.
The government is doing little and next to nothing in terms of dealing with the needs of the poor and that is why poverty is thriving. This is something that has been done over the years in order to institute poverty amongst some groups of people. And the only way through which there could be a change is the creation of a conscious effort and a set of policies to deal with the institutionalized poverty and vicious cycle of poverty in most parts of America. To deal with the situation, there must be some kind of actions and processes that ought to be put together and used to provide education and special forms of educations that will help the younger generations of people who grow in poverty. This will help them to go through university and get some good skills that can be applicable to the development of the earning capacity of these poor people.
Proper and well-structured education and welfare is the solution to poverty in America. Education is central and vital for the elimination of poverty because most poor people are essentially limited in their level of innovation and their ability to gain the necessary skills to take up top jobs. Therefore, there is the need for the US government to take conscious measures to correct these negative trends and help the poorest Americans to get equal opportunities and scholarships to promote the wellbeing of such persons. Welfare is also necessary to promote the wellbeing of the poor. This is because the vicious cycle of poverty can best be handled through the provision of financial injections to deal with the economic gaps that people live with. Therefore, the poorest people must be given financial resources to get better resources and get the chance of getting the same lifestyle as the richest people. Income redistribution is a function of the government. This is because the government has sufficient power to tax the extremely rich and use their money to support projects that will increase the money that is within people’s pocket. This includes the provision of subsidiaries and benefits for the poorest people and enabling them to achieve the best in everything they do and how they do it. There must also be major concessions and affirmative actions to help the poorest Americans to get the best of solutions to their problems. This is because many are poor due to systematic circumstances that make it impossible and extremely difficult for them to enter the job markets. Therefore, it is important and vital for such persons to focus on getting the best in everything they do and promoting better actions and processes.
Conclusion
There is a major wealth gaps in the United States. And this is mainly based on the fact that 15% of Americans live on an average of $10,000 per year. The research argues that the rich are powerful. They have a lot of money and are able to pay politicians to gain favorable policies that help them. There are also many challenges of the poor Americans which causes them to live in a vicious cycle of poverty. There are low earnings, which leads to low savings and then low investments. Due to this, they remain poor and there is nothing that anyone can do about it. Furthermore, there is a problem with institutionalized structures which goes back into America’s history that leads to poverty in specific communities. Thus, it is conclusive that the US government will have to take corrective measures like increasing taxes on the rich and increasing welfare. This way, the poor will get the right support that will help them to live above the challenges ahead of them.
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